Belt and Road Initiative to generate US$350b in infrastructure projects in 5 years, law firm says

The Belt and Road Initiative will generate US$350 billion worth in infrastructure projects within the next five years, law firm Baker McKenzie said in a report.

The report, co-authored by Silk Road Associates, highlighted 10 markets outside China's mainland as primary investment destinations along the Belt and Road.

The 10 markets, including India, Indonesia, Iran, South Korea, Poland, Russia, Saudi Arabia, China's Taiwan, Thailand and Turkey, account for nearly two thirds of GDP of the total more than 60 Belt and Road countries.

The official data showed that 50 Chinese state-owned enterprises have already invested or participated in nearly 1,700 projects in Belt and Road countries since the initiative was launched three years ago.

This number is set to grow significantly in the next five years, particularly as private Chinese interests and international partners begin to invest in the wake of these SOEs, according to the report.

"A tangible shift in Chinese commercial activity in the BRI region over the past six months should now leave no doubt about China's intention to see BRI become a defining force in the global economic landscape, for decades to come,” said Ben Simpfendorfer, Founder and CEO of Silk Road Associates.

While infrastructure development has been the primary driver of BRI activity to date, the report identified sectors including technology and telecommunications, manufacturing and eventually consumer goods and retail as all starting to play a larger role in BRI over the next five years and beyond.

However, it also cautioned against risks including foreign investment restrictions, antitrust regulations, tax, local employment and environmental laws, as well as political risks in some jurisdictions.

Stanley Jia, Chief Representative of Baker McKenzie's Beijing office, said: "While BRI was seen at its inception as predominantly the preserve of Chinese SOEs, funded by Chinese banks, and staffed by Chinese workers, the sheer scale and ambition of the initiative means there will be plentiful opportunities for those local and multinational companies that can work hand in hand with Chinese organisztions for mutual benefit, particularly as the next wave of Chinese investment arrives."

The Belt and Road initiative was put forward by President Xi Jinping in 2013 to boost economic links between China and countries across Central Asia, the Middle East and East Europe, Southeast Asia and Africa.